Legislative Session Has Ended - SB 497 Approved

Wednesday, April 10, 2013

The New Mexico Legislative session officially ended on March 16 and any legislation not signed or vetoed by the governor by April 5th was pocket vetoed. In regards to Homeowners Associations, SB 497 also known as the Homeowner Association Act was approved and will go into effect on July 1, 2013.

Any association formed/established AFTER July 1, 2013 must record notice with the county clerk within 30 days. EXISTING associations need to record with the county clerk within the next year, before June 30, 2014. Including in the filing is the disclosure of the management company charged with preparation of disclosure documents and subdivision place and declarations. By failing to record a notice the associations authority to charge an assessment, fine or enforce a lien for nonpayment shall be suspended until notice is recorded.

Section 5: Record Disclosure to Members

Requires disclosure to all members and be available for lot owners within 10 business days of the request. Not fee shall be charged for making the records available for review but a reasonable fee may be charged for copies. A list of the 11 items for discloser can be found in this section.

Section 6: Duties of a Homeowner Association

Allows association to exercise powers as conferred in the documents, including lien a lot for assessments or fines. By recording the declaration this constitutes notice for the lien. Upon 10 business days of receipt of written request by lot owner, a statement of unpaid assessments shall be furnished and considered binding.

Section 7: Duties of Board Members and Officers / Budget

Board members shall perform their duties with fiduciary to the lot owners. A budget shall be adopted annually and within 30 calendar days after adoption a summary shall be provided to all owners.

Section 8: Declarant Controlled

Regardless of what is noted in the declaration, the declarant shall terminate control no later the earlier of:

60 days after 75% of the lots are owned by someone other than the declarant.2 years after they have ceased to offer lots for sale. 2 years after development right to add new lots was exercised. The day the declarant give written notice voluntarily terminating their rights.

*Section 9: Proxy and absentee voting

Proxy and absentee ballot shall be allowed.

*Section 10: Financial audit

A community of 100+ lots has do a financial audit, review or compilation of the association annually within 180 days of the association fiscal year, unless specified in the community documents to be an audit by a CPA. For those under 100 lots, upon majority vote the board shall provide a financial audit, review or compilation of records.

Section 11: Contract Disclosure Statement

Seller shall provide a disclosure certificate from the association no later than 7 days before closing, buyer can cancel the contract within 7 days after received the certificate.

Section 12: Sale of Lots

Within 10 business days for receipt of written request from owner, association shall furnish a disclosure certificate. Association may impose reasonable charges for preparation of the certificate.

Section 13: Purchasers Cancellation of Contract

If buyers cancels, they may do so by hand delivering notice to seller, without penalty and payment shall be refunded within 15 days.

*Section 14: Attorney Fees and Costs

A court may award attorney fees and costs to prevail party in a civil action provided the declaration or bylaws allow.

Section 15: Applicability

*Sections 9, 10 and 14 do not apply to existing associations created before July 1, 2013, provided any amendment to community documents comply with this act.

Sections 4 and 8 does not invalidate existing provisions.

Does not apply to condominiums which are governed by the Condominium Act.